In the past, the main revenue streams for telecom operators have been voice and messaging (SMS) with data coming in at third.However, these revenues streams have been dramatically impacted by the advent of OTT (over-the-top).

Reports suggest that telcoms have lost around $386 billion in revenues in the last six years to the increasing consumer preference towards OTT platforms for messaging and VoIP.

Telecoms have attempted to tackle OTT by trying to  “beating them at their own game”. For example, Deutsche Telekom launched their OTT offering Magenta TV while AT & T launched Watch TV last year.

Other Telecoms have opted to partner with existing OTT businesses. Telecoms in India have gone down this route of partnering with existing OTT players as they look to gain a foothold in the country. For instance, Airtel has partnered with Amazon Prime whereas Vodafone has joined forces with Netflix.

Telecoms are also leveraging their advanced network capabilities by investing in 5G. Telecoms can differentiate their offerings with greater bandwidth and lower latency services, including rich communication services and high-definition voice.

Telecoms continue to invest in value added services by building new and improved services based on profiling and can repackage their data to help other businesses understand their customers better.

Loyalty programs provide  a wealth of customer data and in doing so, loyalty programs could become one of the key strategic plays for the future generation of telecoms.

Smartphone with gifts displayed reflecting retail customer loyalty program

Can a telcom loyalty program provide a  point of difference from OTT venders?

Furthermore, could telecoms monetise their loyalty programs and provide a new revenue stream? We will look at this in a future blog but for the momment, we are going to explore how a loyalty program can provide a point of difference from OTT venders.

Loyalty Programs: Breaking Things Down

In an era where OTT subscribers are on the rise, starting or investing in  a loyalty program can potentially unlock a number of critical benefits for telecoms including:

  • Decreasing attrition rate and increaing APRU’s
  • Increasing retention and acquisition of customer

According to another recent study, about 71% of consumers say that loyalty programs are a meaningful part of their relationship with any particular brand.

About 72% of Gen Z and Gen X consumers, along with 68% of millennials, also say that they could easily be persuaded to choose one brand over another due to the presence of a loyalty program that they found particularly attractive.

OTT services may be undeniably convenient but they represent a passive relationship between a consumer and the content they enjoy.

Maybe the one thing most OTT services can never do is create a true loyalty program, creating a gap in the customer experience that represents a way to deepen your brand’s relationship with your audience and a key value differentiator at the exact same time.Telecoms can leverage loyalty programs to:1)             Build meaningful relationships with their customers

2)             Increase customer engagement

3)             Create and enhance customer experience with the brand

4)             Entice new customers to change their behaviours simultaneously retaining existing customers by rewarding present behaviour.

Loyalty programs can help telecoms significantly boost their customer retention efforts, too. If someone is thinking of making the jump to an OTT service – or to a competitor – they’re more likely to think twice if they have the potential to lose out on a number of incentives that they truly enjoy.

Operators don’t have to make huge investments to build and design a loyalty program.

Example of loyalty programs include:

  • gift-based
  • points-based and tiered (e.g., Gold, Silver, Bronze inclusions
  • coupons
  • concierge services
  • financial services

Yes, OTT providers represent one of the biggest threats to telecom companies in a generation or more – and it’s also one that consumers have already proven that they’re willing to embrace.

But not all change needs to be a bad thing – sometimes disruption is necessary to give way to innovation.

By embracing loyalty programs, telecom providers can create a true value differentiator with OTT providers – not to mention with competitors, too. That alone may be enough to guarantee a decade of success or more.

Posted in Loyalty and Loyalty Programmes, Loyalty Programmes